Anastasia Zakolyukina is an Associate Professor of Accounting and a William Ladany Faculty Scholar at University of Chicago Booth School of Business, Ian D. Gow is a Professor of Accounting at the University of Melbourne, and David F. Larcker is the James Irvin Miller Professor of Accounting, Emeritus, at Stanford Graduate School of Business. This post is based on their recent paper. Related research from the Program on Corporate Governance includes What Matters in Corporate Governance? (discussed on the Forum here) by Lucian Bebchuk, Alma Cohen, and Allen Ferrell.
A significant body of research on corporate governance has emerged in recent decades. Much of this research has focused on individual governance provisions, such as staggered boards or CEO duality. Yet, a careful reading of this research suggests that for most governance provisions, the evidence is mixed. Some papers will find that a provision is good for shareholders, while other papers will find that it is bad. Often later papers attempt to synthesize research and find that the evidence is mixed at best. (See Larcker and Tayan [2020] for discussion of prior research on corporate governance.)
Some papers have looked to incorporate individual governance provisions into broader measures of corporate governance quality. Typically these measures will involve aggregation of governance provisions into a kind of index. But again the evidence is often mixed.
